By many measures, the American economy is strong, with low unemployment and gross domestic product poised to grow in 2026. But discontent is pervasive among consumers.
Why the disconnect?
Joe Brusuelas, chief economist of RSM US, and Neil Bradley, executive vice president for the U.S. Chamber of Commerce, discussed these issues and many others in a wide-ranging discussion of the American economy on Dec. 10.
Brusuelas cited the twin dynamics in the economy of stagnant wages and elevated inflation. Inflation, he said, will take some time to cool down.
“It’s going to be a number of years” to reach the Federal Reserve’s 2% target, Brusuelas said during the seminar, which was webcast to a live audience. The supply of goods, he said, still needs to catch up to consumer demand, and real wages, after adjusting for inflation, need to rise by more than they are now, which is less than 1%.
Bradley talked of the significance of inflation staying at 3%, significantly higher than the Federal Reserve’s target.
“The difference between 2% and 3% is 50%,” he said. “That is a huge leap.”
RSM US MMBI
